Foxconn Electronics (the registered trade name of Hon Hai Precision Industry) has completed another step in its plan to become an ODM handset maker through its acquisition of a 56.48% stake in Chi Mei Communication Systems (CMCS), according to market sources.
Foxconn is currently the world’s second largest EMS (electronics manufacturing service) company and has mobile phone manufacturing contracts with Nokia, Motorola and Siemens as an OEM.
According to market sources, Foxconn’s acquisition of CMCS is expected to bring a fierce competition between Compal Communications and Foxconn to win ODM orders for low-end handsets from Motorola, the Chinese-language Commercial Times reported Saturday.
The paper also reported the market sources as saying that CMCS will handle designs works for two entry-level handsets for Motorola, while Foxconn would handle back-end assembly. The sources said that shipments are expected to start by the end of this year at the earliest, the paper added.
Compal shipped 6.8 million handsets in the first quarter of this year, compared to the total of 8.6 million units it shipped in full-year 2004, according to company data. Compal also expects its handset shipments for 2005 to reach 25 million units.
In addition to competing with Compal, Foxconn may also take ODM orders destined for other Taiwan handset makers, including Arima Communication, BenQ and Lite-On Technology, the Chinese-language Economic Daily News (EDN) said on a May 14 report.
Foxconn is also poised itself to obtain ODM orders from Motorola for high-end handsets as CMCS currently designs and manufactured high-end models for the US vendor, according to the EDN report.
Article translated by Steve Shen and edited by John McClure
